Altria takes 35% stake in Juul, valu e-cigarette maker at $38 billion

Altria provided investors with some updated financial guidance in the announcement. It warned that its full-year adjusted earnings per share will be slightly below the low end of its long-term 7 to 9 percent adjusted earnings because of the debt it’s incurred from its investments in Juul and Canadian cannabis company Cronos.

Altria invested $1.8 billion to take a 45 percent stake in Cronos. Both investments comes as cigarette sales fall at a faster clip than anticipated, threatening Altria’s usual tactic of raising prices to offset volume declines.

Some analysts have speculated what an investment in Juul means for Altria’s relationship with Philip Morris International, the company it spun off in 2008. The two have an agreement for Altria to commercialize PMI’s new heated tobacco product, IQOS, in the U.S. if the FDA clears it. And PMI currently sells Altria’s e-cigarette brands internationally.

Since the separation, Altria has operated largely in the U.S., while PMI has stayed international, meaning the two companies haven’t directly competed. Juul’s products are already sold in eight markets overseas.

“We remain resolute that IQOS offers the best solution for helping those who would otherwise continue smoking cigarettes to switch to a better choice,” PMI CEO Andre Calantzopoulos said in a statement.